LightSquared loses carrier backing as LTE FCC defense prepared

Beleaguered would-be LTE provider LightSquared faces another imminent set-back, insiders claim, with another high-profile investor supposedly set to cancel a contract after the FCC roadblocked network rollout. LightSquared will get $65m back in prepayments, the WSJ‘s sources say, when Sprint announces it is tearing up its agreement, with the decision expected to be made public today.

The contract had been for a 15-year deal between the two companies, with LightSquared intending to use a US-wide LTE network to deliver mobile broadband. However, the FCC decided that the satellite technology LightSquared planned to implement would interfere with spectrum already used by GPS, and – deeming the stability of the global positioning system to be far more important – canceled the incipient carrier’s approval.

LightSquared has recently hired a high-profile legal team to take on the FCC, and according to sources will file a defense against the agency’s decision today. That argument – believed to run in the order of 150 pages – will supposedly question the validity of the spectrum testing, as well as chase a new angle on regulatory precedences.

Nonetheless, it’s unclear how long LightSquared can continue operations without a 4G network to sell, and the carrier has already been forced to slash its workforce. Analysts predicted earlier this year that the company had sufficient funding for a few more months, though LightSquared itself claims it could operate for “several quarters” more.